Correlation Between KT Submarine and SK Telecom
Can any of the company-specific risk be diversified away by investing in both KT Submarine and SK Telecom at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining KT Submarine and SK Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KT Submarine Telecom and SK Telecom Co, you can compare the effects of market volatilities on KT Submarine and SK Telecom and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in KT Submarine with a short position of SK Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of KT Submarine and SK Telecom.
Diversification Opportunities for KT Submarine and SK Telecom
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 060370 and 017670 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding KT Submarine Telecom and SK Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Telecom and KT Submarine is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on KT Submarine Telecom are associated (or correlated) with SK Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Telecom has no effect on the direction of KT Submarine i.e., KT Submarine and SK Telecom go up and down completely randomly.
Pair Corralation between KT Submarine and SK Telecom
Assuming the 90 days trading horizon KT Submarine Telecom is expected to generate 3.21 times more return on investment than SK Telecom. However, KT Submarine is 3.21 times more volatile than SK Telecom Co. It trades about 0.08 of its potential returns per unit of risk. SK Telecom Co is currently generating about 0.06 per unit of risk. If you would invest 556,000 in KT Submarine Telecom on November 1, 2024 and sell it today you would earn a total of 1,196,000 from holding KT Submarine Telecom or generate 215.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.19% |
| Values | Daily Returns |
KT Submarine Telecom vs. SK Telecom Co
Performance |
| Timeline |
| KT Submarine Telecom |
| SK Telecom |
KT Submarine and SK Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KT Submarine and SK Telecom
The main advantage of trading using opposite KT Submarine and SK Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KT Submarine position performs unexpectedly, SK Telecom can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in SK Telecom will offset losses from the drop in SK Telecom's long position.| KT Submarine vs. LG Household Healthcare | KT Submarine vs. Polaris Office Corp | KT Submarine vs. Homecast CoLtd | KT Submarine vs. NICE Information Service |
| SK Telecom vs. Foodnamoo | SK Telecom vs. Automobile Pc | SK Telecom vs. CU Medical Systems | SK Telecom vs. Jinro Distillers Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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